Frameworks

The seven Frameworks below are the operating partner to the Handbook. To view all the Frameworks in one document, please click on the link to the right.

Frameworks

Introduction

These define our operating parameters, setting out the process which will be followed in the relevant instances e.g. the Compensation Fund Operating Framework sets out the rules which the CLC applies in managing its compensation scheme.

ABS Licensing Framework

IntroductionPurpose of FrameworkThe purpose of this framework is to ensure that consumers have confidence in the way bodies owned or managed by Non-Authorised Persons – i.e. someone who is not a lawyer and so is not authorised by an Approved Regulator to provide a reserved legal activity such as conveyancing, probate, litigation or advocacy – deliver services regulated by the CLC. To achieve this, the CLCwill only license bodies able and willing to act in a principled manner and deliver the CLCCode of Conduct’s Outcomes by complying with its Overriding Principles:-

Act with independence and integrity;

Maintain high standards of work;

Act in the best interests of Clients;

Comply with your duty to the court;

Deal with regulators and ombudsmen in an open and co-operative way; and

Promote equality of access and service.

Overview of Framework

This document sets out:

what is meant by a Licensed Body (also called an Alternative Business Structure);

how the CLC expects Licensed Body applications to be made;

the information upon which it bases its application determinations;

the circumstances in which an application may be approved, made subject to conditions or refused;

how licence determinations can be appealed; and

the regulatory responsibilities of successful applicants must comply; and the range of regulatory/enforcement responses available to us if these are not met.

Terms used – words presented in bold italicised font – such as Authorised Persons, Approved Regulator and Overriding Principles above – are defined in the Glossary of Terms provided at the rear of the CLC Handbook. Please refer to these definitions where you need clarification.CLC Handbook – references are made to the CLC’s Code of Conduct, Licensed Body, and Conflicts of Interest Code; these are found in the CLC Handbook (available on the CLC website) and should be read in conjunction with this Framework.

Forms of Alternative Business Structures (ABS)
2.1 The 2007 Act removed restrictions on the management and ownership structures of traditional legal services firms. Non-Authorised Persons (non-lawyers) are now able to be owners of legal services providers and such firms are now able to provide other services alongside legal activities. For instance:

a sole CLC lawyer and an independent financial adviser might set up a business providing conveyancing services and mortgage advice;

2.2 Combining businesses in such a way might allow overhead savings to be made, enhance career progression opportunities for Non-Authorised Persons – providing skills such as strategic leadership, management, human resources, finance and IT, essential to a well-run business – and offer clients the opportunity to source a range of different services from one provider (a one-stop shop).

2.3 We use the term licensable body to mean a business which is applying to become a CLC Licensed Body. ‘Alternative Business Structure’ is a widely recognised term, but it s not used in the main body of the 2007 Act text. Therefore we use the term ‘Licensed Body’ when referring to the licensing of such structures.

2.4 A Licensed Body may take the form of:

A legal body part-owned by a Non-Authorised Person

A legal body owned by Authorised Persons but managed by at least one

Non-Authorised Person

A business wholly owned by a Non-Authorised Person(s) providing both legal and other services; or

A range of models in between.

2.5 It may be constituted as a partnership, a Limited Liability Partnership, or Limited Company. The structure and business model is of the body’s choosing.

2.6 A licensable body can be partly or wholly owned by a Non-Authorised Person(s) and it can provide both legal and non-legal services. Provided that one manager, the Head of Legal Practice (HoLP), is an Authorised Person it can otherwise be managed by Non-Authorised Persons. NB. If the HoLP is not authorised to deliver the particular legal service the body provides there must be another Authorised Person who is so authorised.

2.7 As a Licensing Authority regulated by the Legal Services Board the CLC is able to license and regulate ABS providing conveyancing, probate, litigation and advocacy* services with a range of other services.

A designated Head of Legal Practice who is an Authorised Person in relation to Reserved Legal Activities

A Head of Finance and Administration (HoFA).

3.2 Legal services must be provided or supervised by Authorised Persons licensed by an Approved Regulator, such as the CLC or Solicitors Regulation Authority. Any non-reserved legal activities must be provided or supervised by appropriately experienced and/or qualified persons.

3.3 A Licensed Body must have professional indemnity insurance in place which complies with the minimum requirements of Article 3 IMD and the CLC’s PII Policy Wording.

3.4 If the CLC is not satisfied by the conditions and cover provided by the authorised insurer, the body will be required to take out a supplemental policy so that the professional indemnity complies with the minimum requirements of Article 3 IMD and the CLC’s PII Policy Wording.

3.5 No body may provide legal services regulated by the CLC unless and until it has Professional Indemnity Insurancewhich complies with these requirements and has produced evidence of insurance to us. NB. A body may increase the level of indemnity cover above the minimum required under Article 3 IMD and the CLC’s PII Policy Wording.

3.6 The CLC maintains a Compensation Fund for the purpose of making discretionary payments to persons who have suffered loss as a result of negligence, fraud or dishonesty or a failure to account, by a CLC-regulated body. Each body licensed by the CLC is required to make a contribution to the Compensation Fund. The fee payable is a percentage (as determined by the CLC and approved by the LSB) of the turnover (or estimated turnover) of that body. The income received is applied solely for the purpose of maintaining, managing and administering the Fund.

3.7 The CLC requires each body to pay an annual regulatory fee. The fee payable is a percentage (as determined by the CLC and approved by the LSB) of the turnover (or estimated turnover) of that body. The income received funds the regulatory activities of the CLC, but not any costs attributed to the Compensation Fund.

3.8 A body which is able and willing to meet all of these requirements can apply to become a CLCLicensed Body.

3.9 We cannot accept applications from Special Bodies.

Licensed Body (ABS) Applications4.1 Applications must include:

a correctly completed CLCABSLicensed Body application form (including identification of the Regulated Services the body wishes to provide);

declaration, and proof of identity, of the HoLP and HoFA and consent for data verification to be carried out;

declaration, and proof of identity, of each Authorised PersonManager;

declaration, and proof of identify, of each Non-Authorised Person Manager, and consent for data verification to be carried out;

declaration, and proof of identity, of each Authorised Person with a material interest*;

declaration, and proof of identity, of each Non-Authorised Person with a material interest*, and consent for data verification to be carried out (the declaration must identify any associates);

if it is a Company or LLP its certificate of incorporation;

evidence (or an offer) of appropriate professional indemnity insurance;

the application fee payable.

There are many ways a person can hold a material interest* – please ensure you reference the CLC Handbook Glossary of Terms.

4.2 We would prefer to receive applications electronically (in Microsoft Word format), but hard copy applications by post are also welcome.

Licence Application Data

4.3 Full and frank information disclosure is needed to help us determine if:

owners are fit to own;

managers are fit to manage; andthe body is fit to provide legal services to the public.

4.4 We require the following information:

Persons

Declaration of Persons with a material interest of 10% or more interest in the body;

Declaration of associates with 3% or more interest;

Declaration of Head of Legal Practice accompanied by details of relevant experience, qualifications, training and professional history information;

Declaration of Head of Finance and Administration accompanied by details of relevant experience, qualifications, training and professional history information;

Declarations of all Managers;

Declarations of Authorised Persons (specifying which activities they are authorised to provide and by which Approved Regulator);

Staff structure, including numbers of Authorised Persons and Non-Authorised Persons.

Financial

Proof of funding source;

Business Plan & Financial Forecasts;

Bank details;

Where applicable, the organisation’s last 3 years of accounts.

Statements

An outline of the services proposed and how you will ensure they are delivered to a high standard;

Statement outlining compatibility with delivery of the Code of ConductOutcomes and the Licensed Body Code (and where there are issues, details of how these have been, or will be resolved);

Who will carry out Reserved Legal Activities;

How the body aims to improve access to justice.

Arrangementsfor:

Compliance with CLCregulatory arrangements;

Notifying us of a breach of regulatory responsibilities;

Notifying us of a proposed change of material interest;

Provision of any non-reserved legal activities;

Governance and management;

HoLP and HoFA to have management level status and entitlement to dissent from decisions made by the management;

Preventing and dealing with conflicts of interests and improper influence;

Complaints-handling;

Ensuring the body employs only fit and proper persons (and no-one disqualified by a Licensing Authority).

Any criminal charge or conviction (including spent convictions and cautions) or cases pending in the UK or elsewhere;

Any previous disciplinary proceedings commenced by a professional or regulatory body in the UK or elsewhere (whether concluded or not);

Any adverse order or finding of a civil court or employment tribunal;

Any disqualification as a director;

Any declaration of bankruptcy (and whether or not this has been discharged) or Individual Voluntary Arrangement;

Disqualification from acting in any capacity for a legal services, financial or other provider (including a Licensed Body);

Any other information that could reasonably be expected to have a bearing on the individual being fit and proper to own or manage a Licensed Body.

NB. The requirement for accounts for the 3 years immediately preceding an application applies to companies which own (10% or more) of the licensable body.

Governance and Management Arrangements

4.5 The CLCCode of Conduct and the underpinning Conflicts of Interest Code make clear our requirements regarding the prevention, identification and mitigation of such conflicts. All bodies regulated by the CLC must comply with these requirements in order that Clients receive high standards, and independent, service.

4.6 The CLCLicensed Body Code explicitly requires that Non-Authorised Persons with a material interest must not be allowed to exert improper influence.Licensed Bodies and the Authorised Persons within them must always support the constitutional principle of the rule of law and act in the best interests of their Clients. Licensable bodies must be able to demonstrate that they have in place arrangements enabling this.

4.7 To be licensed a licensable body must employ at least one Authorised Person who is authorised to provide each of the Reserved Legal Activities the body proposes to deliver. If these persons are not managers we will need to be satisfied that the body’s arrangements take this into account.

4.8 Given the importance of the roles of the HoLP and HoFA we will be looking for skilled individuals suited to the business needs of the body. We set no specific requirements in this area other than the HoLP should be an Authorised Personand a recommendation that the HoFA should have accountancy experience and/or an accountancy qualification.

4.9 The suitability of the proposed candidates will be judged according to the body’s size and risk profile. For example, it may be acceptable for the HoFA of a small firm not to have an accountancy qualification. In such instances, accountancy experience would be acceptable.

4.10 Only those bodies with appropriate arrangements will be licensed. Examples of high-level good practice of risk management and business arrangements are provided in the CLC Handbook, Management and Supervision Guidance.

Employment Arrangements

4.11 Our licensing terms are clear in their requirement that the interests of the public and of Clients must be protected. It is therefore very important that a Licensed Body employs only those persons it is confident will act in a manner compatible with these interests.

4.12 It is for the body to determine the most appropriate arrangements for it to be confident of the fitness and probity of its employees. This may take the form of an employment contract clause which requires employees to declare an issue to the body, a self-declaration form (which is completed when an offer of employment is made and on an annual basis thereafter), a Disclosure and Barring Service (DBS [criminal history]) check, or other system. The body may target particular roles which it considers more important in this regard than others e.g. those handling Clientmonies may be subject to a DBS check whilst other employees are required to declare any fit and proper issues.

4.13 The Legal Services Board (LSB) maintains a list of all persons disqualified from roles in Licensed Bodies. The list is available to view on the LSB’s website for you to check against your employees, or proposed employees. The list is available to view on the LSB’s website: http://www.legalservicesboard.org.uk/

4.14 You must not employ any listed person in the role in respect of which they are disqualified. To do so is a significant breach of your regulatory responsibilities and is likely to result in the body’s licence being suspended and/or revoked.

4.15 We consider the qualifications and experience of the Licensed Body’s employees to
be a matter for the body itself to decide. It is the licensable body’s duty to ensure it has the appropriate individuals in place to ensure the regulatory requirements are met and that the rule of law is supported.

Business Plan and financial projections

4.16 The Business Plan must cover the 3 years from when the body could reasonably expect to be licensed (90 days after the CLC has received a complete application). An applicant will need to demonstrate they have critically examined their:

financial forecasts;

employees numbers, skills and knowledge;

anticipated turnover;

running expenses;

capital investment;

capital expenditure and liquidity;

how the body will be initially funded (and how prepared for a given initial period where it is likely to receive little comparative income);

proposed premises;

the body’s marketing strategy;

its accounting systems and procedures;

any expansion plans; and

any other information deemed relevant by the applicant or the CLC.

Access to Justice

4.17 An applicant must be able to demonstrate that licensing the body would improve access to justice i.e. recognition of, and response to potential and actual, consumer needs. This may take the form of provision of a greater range of services and methods of accessing these services, lower prices, extended opening hours, accessibility, online provision, or other factors. It is up to the individual applicant as to how they define access to justice and how they demonstrate they will improve it.

4.18 We anticipate that an application will be refused because of access to justice considerations only in exceptional circumstances.

Supplementary Information

4.19 You may wish to provide examples of how you actively promote the CLCOutcomes, e.g.:-

Certification or assessment of activities by independent or accredited bodies; or

Drawing up your own quality charter or participation in quality charters or labels drawn up by professional bodies (particularly consumer association assessments).

4.20 Provision of supplementary information will be welcomed and judged favourably by the CLC as long as it is pertinent to your application. Please do not provide irrelevant material as this is likely to unnecessarily prolong the application determination period time.

Any other info

4.21 We require the declaration of ‘any other information that could reasonably be expected to have a bearing on their being fit and proper’ with regard to Non-Authorised Persons with 10% or more material interest, HoLPs and HoFAs. This could include:

by a reason of character, conduct or association and in particular has been in breach of statutory requirements regarding payment of tax or for a licence;

they lack capacity within the meaning of the Mental Capacity Act 2005 and powers under sections 15 to 20 or section 48 have been exercised.

Material Interest Details

4.22 The holding by a Non-Authorised Person (i.e. non-lawyer) of a material interest in a Licensed Body is subject to the CLC’s approval. A licence will not be granted until we have approved all Non-Authorised Persons with a material interest. A licence application must identify all Non-Authorised Persons who own or are expected to own such a material interest in the body when the licence is issued. All Non-Authorised Persons with a material interest will be subject to the fit and proper test and must consent to the CLC sharing the information with other bodies for verification purposes.

4.23 The material interest declaration refers both to the actual or proposed material interest (10% or more) and/or any of that person’s associates with a material interest of 3% or more. The type of interest concerned must be identified. Failure to fully and truthfully to declare this information when aware of the facts is a criminal offence making the declarer liable on summary conviction to a fine. There are a number of different ways in which a Non-Authorised Person can have a material interest.

4.24 It is very important that a body providing legal services is able to meet its regulatory responsibilities. Having an accurate picture of those who control Licensed Bodies is an important part of the CLC recognising any risks to this. Therefore all non-Authorised Persons’ material interest must be declared as they are subject to our approval.

4.25 If any of these details look likely to change – e.g. the identity of an owner, or the nature or value of their interest – whilst we are determining the licence application, the applicant must notify us of this within 7 days of the proposal. If the applicant had no knowledge of a change which has taken place they must notify us within 7 days after they are made aware. It is a criminal offence not to identify a non-Authorised Person who has, or expects to have, an interest in the event a Licensed Bodylicence is issued to the applicant. If such a breach were to occur, the breach and the fine would be likely to be taken into account as part of the determination of the licence application. However, it is a defence for a person charged with such an offence if they are able to show that they had no knowledge of the duty to notify.

4.26 You must inform all Non-Authorised Person with a material interest that the Licensed Body application process requires them to be identified and that they will need to undergo a fit and proper test, which includes a Criminal Record Bureau Check. You must obtain from them a completed and signed fit and proper declaration form. You must advise them that they may need to provide us with information/documents to inform our licence application assessment (or during the duration of the licence if we become concerned by their material interest). You should also explain that provision of false or misleading information is a criminal offence liable on summary conviction to a fine and on conviction on indictment to a term of imprisonment.

4.27 The fit and proper test helps inform our assessment of improper influence i.e. whether the Non-Authorised Person’s material interest would compromise the delivery of the CLCCode of Conduct’s Outcomes or could cause Authorised Persons to be unable to meet their regulatory duties.

Transitional arrangements for CLCRecognised Bodies5.1 These arrangements apply to bodies licensed by the CLC as a Recognised Body on the date it is authorised as a Licensing Authority but which, because they are owned or managed by persons who are not Authorised Persons, need to become a Licensed Body by the date specified by the CLC.5.2 We will provide these bodies with the information we currently hold on them, requiring them to verify or amend it as appropriate. Relevant data to fill any information gaps must be provided. These bodies must appoint their Heads of Legal Practice and Heads of Finance and Admin; and declare Authorised Persons with material interest and their associates.5.3 These applications will be fast-tracked as they have a track record with us. We are familiar with the structures, systems and controls of these bodies; and have carried out monitoring inspections on them (often over a number of years). A current CLCRecognised Body which applies to become a CLCLicensed Body will receive notification of the CLC’s determination within 42 days of receipt of their completed Licensed Body application. The application will be assessed and determined using the same criteria as new applicants.5.4 Should there have been significant changes to ownership we will extend the 42 day determination period to 90 days to ensure we are confident of capturing any risks to the Code of Conduct Outcomes the new owner(s) may present. Any additional work we have to undertake will increase the application fee payable (see paragraph 7.5).

Licensed Bodies regulated by other Licensing Authorities6.1 An ABS already licensed by another Licensing Authority which is seeking instead to be licensed by the CLC will need to complete the licence application as required by all applicants. An applicant which has had its Licensed Bodylicence revoked by another Licensing Authority will not automatically be excluded from applying for a CLCLicence. However, the licencerevocation will be a relevant factor in our determination of the application. Where we have revoked a body’s licence we will not accept an application if it is made within 12 months of the licence revocation, unless there are exceptional circumstances. We will need to be fully satisfied that the issue which triggered the revocation has been addressed and the remainder of the application would need to evidence that all CLC licensing requirements are met in full.

Fees

7.1 The standard licence application fee is broadly reflective of a range of key factors including cost, size and risk profileof Licensed Bodies.

7.2 The applicant will be charged the cost to the CLC of processing a standard application. On the basis that the standard application will take 2 days to process the fee for a first time Licensed Body application is £1200.

7.3 We reserve the right to require further information and/or statements should we see reasonable grounds to do so. We also reserve the right to charge additional amounts above the standard fee for applications which take more than the expected determination period of 2 days e.g. bodies with unusual or complex ownership, structures, particularly where there is a foreign – i.e. not in England or Wales – ownership element (which may require more extensive data verification endeavours), or where incomplete information has been provided. These will be charged at £80 per hour.

7.4 The CLC will use external advisers where it feels that it is necessary, more appropriate or more efficient to consider parts of the application (e.g. to deal with technically complex, unusually data intense, poorly prepared or urgent applications). It will ask the applicant to pay for the work performed.

7.5 We anticipate there will be less resource required to process an application from a Recognised Body which is currently regulated by the CLC than from an entity which we have not previously regulated. We shall therefore require payment of a lower standard fee of £600 for such applications. We reserve the right to charge an increased fee (based on an hourly rate of £80) on an hourly basis where the time we need to spend in assessing the application exceeds 2 days (e.g. where there have been significant ownership changes or incomplete information has been provided).

7.6 We reserve the right to review the fee schedule and to vary the fee methodology as appropriate.

7.7 The applicant will be required to pay for the data verification (including Criminal Record Checks) which needs to accompany the application. This will be carried out by a provider accredited by the CLC. As the extent of verification of fit and proper data varies according to the role, so does the cost, which is currently in the range £85-£120. We shall notify applicants at the time of making their application of current prices. You may be able to claim back the Value Added Tax from these costs if VAT-registered. We may carry out additional checks if we believe it is appropriate to do so and shall charge the applicant the cost of doing so.

7.8 We anticipate that licence modifications/removal of conditions requests will take no more than 4 hours to determine. The standard application fee for such requests will be £320. We reserve the right to charge additional amounts for particularly complex applications which take longer than this to determine. These will be charged at £80 per hour.

7.9 Should a Licensed Body apply to change the individual person occupying the role of HoLP or HoFA the standard application fee will be £240. This is based on the assumption that such requests will take no more than 3 hours to determine. We reserve the right to charge additional amounts for particularly complex applications which take longer than this to determine. The applicant will be required to pay for the data verification which needs to accompany the application.

7.10 The annual Regulatory Fee will be determined each year. The current rates are set out in the Fees Rules 2010 at www.clc-uk.org.

7.11 Compensation Fund contribution to be determined each year. For the period 1 November 2010 to 31 October 2011, there is a nil contribution

8.1 We will aim to acknowledge receipt of your application within 3 working days. If your application is incomplete we will return it to you identifying those elements which are missing or have not been properly completed.

8.2 Provision of any false, misleading or incomplete information is likely to delay consideration of your application and if material will result in the application being rejected. If the CLC becomes aware after granting a licence that a body, a person with material interest or a manager of that body, has provided false or misleading information the licence may be suspended or revoked.Data Verification

8.3 The HoLP, HoFA, persons with material interest and all Managers must sign their declarations to confirm the information they have provided is correct. Information provided will be kept secure and used only for these purposes.

8.4 We shall carry out such checks as we consider necessary to verify the information you have provided. For the Non-Authorised Persons with material interest, Non-Authorised Person Managers, the HoLP and HoFA, this will include checks of the fit and proper declarations e.g. credit, insolvency, and insurance. We will obtain Standard Disclosure and Barring Service (DBS, previously the Criminal Record Bureau) checks of unfiltered[1] cautions and convictions for the HoLP and HoFA and those with a material interest (this may include associates – see item 8.6). We reserve the right to request a Basic Disclosure and Barring Service check (covers unspent convictions only) for a manager or Authorised Person. The applicant will be required to pay for these checks (see paragraph 7.7). We have information-sharing agreements with other regulatory, professional and data verification bodies to aid the verification. The information will be shared in accordance with data protection legislation.

8.5 We will check the disciplinary records of Authorised Persons with their relevant Approved Regulator. Where this identifies issues we may verify the fit and proper declaration data and charge the applicant accordingly.

8.6 Verification of information on all associates is unlikely to be either practical or proportionate. Only where there are concerns about an associate, particularly significant influence or control concerns, will we seek additional, information or require information to be verified.

Licensing Approach

8.7 All Approved Regulators of legal services providers must act in a way which is compatible with the regulatory objectives. Therefore the Overriding Principles and Outcomes of our regulatory arrangements are devised to support them and a body’s licence application will be assessed in light of these; on receipt of the application and validation of relevant data we will carry out an assessment of the risks posed to delivery of the Outcomes and compliance with the Licensed Body Code if we approve the application for a licence.

8.8 All interested parties will be signposted to the electronic version, or provided with a hard copy of, the CLC Handbook so they are aware of the regulatory responsibilities of a Licensed Body and those involved with it.

8.9 We will assess the application to determine the body’s capability and capacity to deliver the CLC’s Code of Conduct’s Outcomes and to meet the CLC’s Licensed Body Code. Please see the CLC Handbook.

8.10 This will be determined by an assessment of the following factors:

The body’s activities and Client type (including whether the non-reserved legal activities the body is proposing to provide are closely related to the reserved legal activities proposed);

The quality of the governance/management arrangements (including regulatory compliance arrangements such as ensuring Non-Authorised Persons do not cause or substantially contribute to a regulatory breach by the licensed body,or Authorised Persons within it) and risk management strategies;

The quality of the arrangements to prevent and deal with Improper Influence and Conflicts of Interest, ensuring Authorised Persons maintain the Overriding Principles and comply with their own individual regulatory responsibilities;

Probity of funding source;

Financial viability of the body and the integrity of the Business Plan/financial projections in light of the body’s proposals;

Clientmoney handling arrangements;

The quality of operating procedures including complaints-handling;

Resources allocated to, and arrangements for reserved legal activities (in particular who will be providing them or supervising their provision), this will include an assessment of the ratio of Authorised Persons to Non-Authorised Persons;

Competence to deliver non-reserved activities, including the resources, arrangements, sophistication or vulnerability of their Clients, its relatedness to the reserved legal activities the applicant proposes to provide and access to justice implications if the activities were not permitted;

Suitability of proposed Non-Authorised Persons with material interests and how they may impact upon the body’s independence and integrity (they must not prejudice a) delivery of the Code of Conduct’s outcomes or b) the ability of Authorised Persons to meet their regulatory duties);

Suitability of proposed Head of Legal Practice (HoLP) and Head of Finance & Administration (HoFA);

The arrangements in place which permit the HoLP and HoFA to report on matters direct to the CLC without prior consultation or approval from the licensable body, its Managers, owners or associates;

Where the applicant is proposing that the designated HoLP and the HoFA are the same person whether this is appropriate taking account of the size and risk profile of the licensable body;

Suitability of proposed Managers and Authorised Persons;

its professional indemnity insurance arrangements comply with the minimum requirements of Article 3 IMD and the CLC’s PII Policy Wording;

Any other factors which the CLC believes may pose a risk to delivery of the Code of Conduct’s Outcomes.

8.11 We will consider the following factors in determining the suitability of declared Non-Authorised Persons with material interest:

Whether there is a risk of improper influence i.e. that the person’s material interest is likely to compromise delivery of the Code of ConductOutcomes and the regulatory duties of both the Licensed Body and its Authorised Persons (e.g. they are subject to other duties which may conflict/compromise the regulatory duties);

Any concerns identified by the fit and proper tests;

Their financial position;

d) Whether they have been disqualified by a Licensing Authority from acting as an HoLP, HoFA, manager or employee of a Licensed Body;

The person’s associates.

8.12 We will consider the following factors in determining the suitability of the proposed HoLP:

Any concerns identified by the fit and proper test;

If they are an Authorised Person

Whether they have been disqualified by a Licensing Authority from acting as an HoLP, HoFA, manager or employee of a Licensed Body

Whether they have been subject to disciplinary proceedings or disciplinary investigation

Their competence and credibility to fulfil the role effectively

Their level of seniority and whether this is appropriate to the size and structure of the Licensed Body.

8.13 We will consider the following factors in determining the suitability of the proposed HoFA:

Any concerns identified by the fit and proper test

Whether they have been disqualified by a Licensing Authority from acting as an HoLP, HoFA, manager or employee of a Licensed Body

Their competence and credibility to fulfil the role, including their accountancy experience, competence and/or whether they have a recognised accounting qualification

Their level of seniority and whether this is appropriate to the size and structure of the Licensed Body.

8.14 We will consider the following factors in determining the suitability of the proposed Managers:

Any concerns identified by the fit and proper test

Whether they have been disqualified by a Licensing Authority from acting as an HoLP, HoFA, manager or employee of a Licensed Body

Their competence and credibility to fulfil the role

Their level of seniority and area of management.

8.15 Where the beneficial owner is a corporate body the fit and proper test will broadly reflect the approach taken in respect of Licensed Body applications. This may include governance arrangements, financial arrangements and application of the fit and proper test to its Directors. This test may also be applied to the owner(s) of a corporate body.

8.16 We will approve a person’s material interest where we are satisfied that it would not present a risk to the Code of ConductOutcomes or Authorised Persons’ duties and the person is otherwise considered a fit and proper person to own that interest. Should we approve a Non-Authorised Person’s material interest this will be taken to mean that we have also approved any lesser material interest they have in the body.

8.17 Where we consider a Non-Authorised Person’s material interest presents a risk we will seek to impose conditions on that interest. Where we consider a risk too significant to be mitigated by conditions we will object to the interest. In both cases we will issue a warning notice to both the applicant body and the investor specifying the reasons for our intended measure. The notice will state the reasons for our determination and, if we propose to issue a licence subject to conditions, their nature.

Licence Application Determination

8.18 All of our regulatory arrangements seek to promote the regulatory objectives. Our Code of Conduct identifies positive Outcomes which all licensees must deliver through compliance with a number of Overriding Principles of behaviour. All applications will be assessed against the body’s capability and capacity to deliver on these responsibilities.

8.19 If we are not completely satisfied that the body will deliver the Outcomes, we may issue a licence subject toconditions or may refuse the licence application.

8.20 Provision of adverse information concerning an individual does not necessarily preclude our approval of them. We will assess the information provided against the individual’s proposed role and against the circumstances e.g. the individual may be able to satisfy the CLC they have learnt from the identified event. Our determination will depend upon the nature of the information provided and whether this puts at risk compliance with the body’s regulatory responsibilities. For instance, we are likely to disregard spent convictions for less serious offences, provided they are not dishonesty or fraud related. We consider that dishonesty or fraud related convictions are likely to present too great a risk to delivery of positive Outcomesfor Clients. In such instances, we are unlikely to be confident that the body will meet Overriding Principle 1 Act with Independence and Integrity; and Overriding Principle 5 to Deal with regulators and ombudsmen in an open and cooperative way. Where an individual has been declared bankrupt or been subject to an Individual Voluntary Arrangement (particularly if it is recent), it is likely that an application for that individual to be approved as a HoFA will be refused as the role requires both financial capability as well as probity.

8.21 We are likely to defer our decision until after any pending cases or proceedings have been determined, unless the subject matter of the case or proceeding is less serious and is not dishonesty related.

8.22 The determination of the risks presented by individual persons will be based
upon an assessment of the following:

Is there full confidence that the HoLP/HoFA has integrity and is trustworthy and honest?

Unless there are exceptional circumstances the CLC will not be satisfied that the individual is a fit and proper person and will refuse the candidate if they have:

convictions for offences involving dishonesty; or

deceived or sought to deceive others, e.g. academic authorities, employers or members of the public.

The following might satisfy the Committee of the individual’s present integrity, honesty and trustworthiness:

if in view of the time since the behaviour occurred the individual has demonstrated a subsequent pattern of exemplary behaviour; or

the incident was of a minor nature, as indicated by the sentence or sanction applied

The type of evidence considered should normally include each of the following:

at least one independent account of the event(s), including sentencing remarks where a criminal conviction is being considered;

references from at least two independent people who know the individual well and are familiar with the matters being considered. Ideally one of the references should be provided by an Authorised Person of good standing;

references from employers, or from a professional or regulatory body; and

the individual’s account of the events and attitude towards them

Where a conviction or disciplinary hearing is being considered the CLC will not question or look behind the finding other than in exceptional circumstances, although material such as sentencing remarks and any explanatory statement will be considered. For example, a decision may be demonstrably wrong where later events, such as after acquired evidence or a change in the law, call the original decision into question.

Where the matter being considered concerns academic misconduct (e.g. plagiarism) the CLC will take into account the range of academic misconduct that occurs.

For the purposes of the assessment whether an individual is a fit and proper person to become an HoLP/HoFA , there will be particular concern where in the commission of academic misconduct the individual has committed deliberate and dishonest acts in order to achieve personal gain or advantage.

The following factors would therefore be of particular interest to the CLC:

the extent to which the individual was aware of the rules and procedures governing the referencing of material, or the use of group work or collaborative material;

the extent to which the individual could reasonably have been expected to realise that the offence did not constitute legitimate academic body;

the extent to which the individual acted with intent to deceive; and

the degree of benefit or advantage gained as a result of the offenc

As in the approach to consideration of criminal convictions, the assessment will not seek to re-open the investigation undertaken by the training organisation, nor will it cast doubt on the validity and appropriateness of the decision taken, providing appropriate investigation and disciplinary procedures were followed, but statements intended to explain or mitigate the conduct in issue will be considered.

Is there full confidence that the HoLP/HoFA are willing now to comply with legal and regulatory requirements?

Unless there are exceptional circumstances there will not be full confidence and will refuse the candidate if they:

have been convicted of a criminal offence;

have failed to disclose information to a regulatory body when required to do so or has provided false or misleading information;

have been formally disciplined, sanctioned, or barred by a regulatory body; or

have failed to comply with the reasonable requests of a regulatory body.

It may be possible for full confidence to be established in the individual’s willingness to comply with legal and regulatory requirements if:

in view of the time since the incident the individual is able to demonstrate that there has been a subsequent pattern of exemplary behaviour;

a matter that was not disclosed was trivial or in view of the time when it occurred is no longer material or the breach was minor, as indicated by any sanction imposed; or

the incident can be shown to have been the result of a genuine mistake or oversight.

The evidence considered should normally include each of the following:

certificates of standing or statements from the relevant regulatory body or disciplinary tribunal and any limitations on the individual’s rights to practise or freedom to act;

the individual’s explanation for failure to comply; and

evidence of rehabilitation independently corroborated e.g. independent reports, references from employers, or from a professional or regulatory body.

Is there full confidence that the HoFA is able responsibly to manage financial affairs?

Unless there are exceptional circumstances there will not be full confidence that the individual can responsibly manage financial affairs and the candidate refused if:

the individual has been made bankrupt, has entered into an individual voluntary arrangement or has unmanageable debts arising from the individual’s recklessness,

incompetence or dishonesty;

the individual has deliberately sought to avoid responsibility for debts; or

there is evidence of dishonesty in relation to the management of finances.

The following might help to establish confidence in the individual’s ability to manage financial affairs:

if in view of the time since the bankruptcy or occurrence of the debts there is evidence of subsequent sound financial management and conduct and that creditors have been paid;

the individual is able to establish that he was affected by exceptional circumstances beyond his control or which he could not have reasonably foreseen.

The type of evidence considered should normally include each of the following:

credit check information;

the individual’s explanation of the circumstances, corroborated where possible;

actions taken to clear any debts.

The Business Plan and Financial Forecasts will be reviewed to determine:

if it has adequate resources, including financial, skills and knowledge, for the body to be viable and to be effectively run;

how critically they have examined the business’ aims and the market for it;

how realistic the financial projections are;

if the financial forecasts take into account a realistic anticipated turnover, fixed costs and calculated variable costs.
Where there are concerns about the viability or suitability of a licensable body the CLC may refuse to issue a licence or issue a licence subject to conditions.

Is there a risk that the issue of a licence to the body will diminish public confidence in the legal services profession?

Unless there are exceptional circumstances there is a risk that public confidence in the profession will be diminished if a licence is issued to a body in which the HoLP/HoFA:

has served a prison sentence, has remained on licence or is listed on the Sexual Offenders Register;

has misused his position to obtain pecuniary advantage, particularly if associated with the provision of legal services;

has been responsible for dishonest or violent behaviour;

has been convicted of offences associated with obstructing the course of justice;

has been convicted of a racially motivated offence; or

has knowingly worked when his competence was impaired by alcohol or drugs;

in which case, unless the risk can be addressed to the satisfaction of the CLC, the application will be refused or will be issued subject to conditions.

The risk might be addressed satisfactorily if:

in view of the time since the misbehaviour occurred the individual concerned is able to demonstrate that there has been a subsequent pattern of exemplary behaviour; or

the misbehaviour was not of a serious nature, as indicated by the sentence or sanction applied.

The evidence provided should normally include each of the following:

independent accounts of the convictions and behaviours that have given rise to the concerns, e.g. sentencing remarks;

Proposed governance and management arrangements are not sufficiently adequate to ensure the Licensed Body meets the licensing requirements and all members of staff are aware of their licensing responsibilities.

Proposed owner arrangements demonstrate there is a significant risk of undue or improper influence risk

Proposed operating procedures and quality assurance systems are not sufficiently adequate to instil public confidence in the quality of services provision.

The HoLP& HoFA are not readily provided with access to the Licensed Body’s management and staff and the CLCwhenever necessary and are not of an appropriate management level)

Is there a risk that the issue of a licence to the body could result in harm to members of the public, the profession or the body?

The CLC will consider there is a risk of harm to members of the public, the profession or the individual if there is evidence in respect of a HoLP/HoFA that:

they are or have been dependent on drugs or alcohol;

their mental health or their exposure to stressful situations can seriously impair their judgment, their ability to manage their work or their professional relationships

they have been violent with colleagues or Clients; or

they have experienced recurrent episodes of behaviour/dependency/illness;

which have given cause for concern in which case, unless the risk can be addressed to the satisfaction of the CLC, the application will be refused.

The evidence considered will normally include:

recent and full medical reports, including psychiatric reports where relevant;

accounts from employers and other parties; and

a statement from the individual concerned.

8.23 Unless a HoLP or HoFA is demonstrably inappropriate for the role – for instance, the HoLP is not an Authorised Person – we are unlikely to decline an application for either of these posts. If however, a candidate is in our view insufficiently skilled given the body’s size or profile this will inform our risk assessment of the body and may result in conditions such as targeted Continuous Professional Development(CPD) requirements of the individual and/or increased supervision. It is the licensable body’s duty to ensure it has the appropriate individuals in place to ensure the regulatory requirements are met and that the rule of law is supported.

8.24 Should we decide not to approve a proposed HoLP or HoFA because the candidate is wholly unsuited for the role we will not use this decision to refuse the application itself if we are satisfied with all other elements of the application and the body subsequently nominates a more satisfactory individual for the role.

Note: the Rehabilitation of Offenders Act 1974 does not apply for a HoLP or HoFA. Spent convictions should be declared

Non-Authorised Person with Material Interest

8.25 The approach taken will be similar to that identified at 8.22 (a)-(e) and will be assessed against the quality of the body’s arrangements for regulatory compliance (including the calibre and management level of the HoLP/HoFAcandidates). All other things being equal we are likely to be less stringent about adverse information provided on these individuals rather than the roles of the HoLP/HoFA. As identified at 8.22 (a)-(e) we will assess the risks posed by the information presented. This approach will also be adopted where we seek information on an associate who causes us concern. Where an associate is an employee of the body this will inform our assessment of the likelihood of improper influence. Note: the Rehabilitation of Offenders Act 1974 does not apply for those who hold a material interest. Spent convictions should be declared.

Managers

8.26 The approach taken will be similar to that identified at 8.22 (a)-(e) – 8.24. Note: the Rehabilitation of Offenders Act 1974 is not exempted for managers as it is for HoLP/HoFAs and those who hold a material interest. Spent convictions do not need to be declared.

Outcomes-focused

8.27 To protect the public, Clients and the reputation of the legal sector the grant of a licence must not compromise the Code of Conductoutcomes. The CLC determines all correctly completed licence applications it receives. We will only grant a Licensed Bodylicence where the assessment set out at 8.10-8.26 has satisfied us that our regulatory arrangements are/will be complied with.

8.28 The CLC Authorised Officer and their team will determine licence applications based upon an assessment of risk to the Outcomes. Where clarification of the information provided in an application is required the licensable body will be contacted. We will interview the HoLP and/or the HoFA as part of their designation, to discuss details of the application and the applicant’s proposals and to achieve clarification (or reassurance where needed). We may also require other stakeholders to attend an interview to address particular concerns.

Complex applications

8.29 In the case of a particularly complex application or where adverse information is provided the licence application will be determined by the CLC Authorised Officer in consultation with a Legal Practice Inspector (or an employee of equivalent or senior status).

8.30 Adverse information does not necessarily mean licence conditions will be imposed or the application will be refused. If adverse information is provided it will be discussed with the applicant to determine the risk posed to the Code of Conduct’s outcomes, any resource implications for the CLC and the applicant’s willingness or capacity to address the issue. We will not grant the Licensed Bodylicence unless we approve, either unconditionally or conditionally, each Non-Authorised Person’s material interest. Please see section 10 for information on the options available to us on provision of adverse information which could threaten delivery of the Code of Conduct’s Outcomes.

8.31 Where we are not fully satisfied with information provided but would require the body to make only minor adjustments – e.g. a slight amendment of an arrangement – we will require confirmation, which we shall verify, that the adjustment has been made before the licence is issued, rather than impose a condition upon the licence. Conditions will only be imposed where they are needed to safeguard Client interests and where the issue is such that it must be formally recognised within the licenceterms.

Notification

8.32 We aim to notify all applicants of our licence determination within 90 days of receiving a complete application. If, because of the complex nature of the application or because we require additional information, additional time is needed to make the determination we will notify you of this before the end of the original 90 day determination period. We will inform you of the reasons for the extension and its additional period, which will not exceed a further 90 days.

8.33 The CLC will determine one of the following:

To grant a licence free of conditions; or

To grant a licence subject to conditions (to mitigate risks posed to the Code of ConductOutcomes);

To refuse the application (because of the seriousness of the risk(s) posed to the Code of ConductOutcomes).

Granting of a Licence

8.34 Where a licence is granted it will be issued as soon as is reasonably practicable. If we are satisfied that all Non-Authorised Persons material interest holders meet our approval requirements the interest will be approved without conditions and we will advise both the Licensed Body and the investor of this as soon as is reasonably practicable.

8.35 The Licence will specify its terms by way of endorsement:

All authorisations that the CLC grants the body to carry on reserved legal activities;

All permissions that the CLC grants the body to provide non-reserved legal activities;

Any conditions applicable to the exercise of the authorisations and permissions.

8.36 The Licensed Body can only carry on its authorisations and permissions in its capacity as the holder of its Licence.

8.37 The Licensed Body must not carry on a reserved legal activity which is not within its authorisations.

8.38 When carrying on its authorisations, a Licensed Body must comply at all times with its conditions.

8.39 Where non-reserved services are permitted we will adopt a co-regulatory approach with the relevant Approved Regulator as per our ABS Multidisciplinary Memorandum of Understanding. Where this is not appropriate it is likely we will require the applicant to ring-fence the services for which it has authorisations and permissions.

8.40 If the application is approved, as a new licensee, we will provide you with any reasonable support or advice you require in the initial setting-up stages and for a short time.

8.41 Licences are issued for an indefinite period – other than temporary licences issued because of a change in the membership of a body – and are valid from the date of issue. Licensed Bodies will be required each year to pay the Regulatory Fee and a contribution to the CLCCompensation Fund. Should a body not provide this fee/contribution they will have invalidated the licence. Licences continue to have effect after a Licensed Body has ceased to practise.

Licensed Body (ABS) Register9.1 Our register of Licensed Bodies will be available on our website. This should aid public confidence in legal services providers, enabling interested parties such as the public to be able to identify licensed bodies and their owners, managersand statutory officers. The following information is held on this register:

Name of Licensed Body

Whether the licence is suspended or revoked and the date on which suspension or revocation took place

Any enforcement action or sanction on the Licensed Body, its owner or any employee

Trading name of the Licensed Body

Previous names of the Licensed Body

The company registration number

The licence number of the body

Previous licences held by the body

The date the licence was issued

Registered address of the Licensed Body

Practising address(es) of the Licensed Body

The names of the Head of Legal Practice and the Head of Finance and Administration

The authorising body of the Head of Legal Practice

The reserved legal activities that the body is authorised to undertake

Any endorsements placed on the Licensed Body

9.2 We will keep the register as up to date as reasonably practicable. It will reflect any change made within 28 days.

9.3 In very exceptional circumstances the CLC may agree it is appropriate not to publish details of the beneficial owner; it is up to the individual applicant to make such a case to us. The CLC will only consider this in exceptional circumstances e.g. where a real risk of physical harm has been demonstrated.

Adverse InformationLicenceConditions10.1 We will assess the risk posed by an applicant body. Where risks differ, so do our requirements. If we are not satisfied that an applicant’s arrangements meet our approval requirements, but could be met through the implementation of additional safeguards, the licence will be issued with conditions. Any conditions will be noted on the licence and on the CLC’s register, in addition to any endorsements (see 8.35).10.2 We will simultaneously issue you with a notice explaining the requirements of the condition(s), the reasons for its imposition and its duration (if time-bound). Any conditions imposed will take effect at the time the CLC directs e.g. a conditionmay take immediate effect or at a future date, or may not have effect until after any appeal in relation to it. Conditions will only be imposed where we consider that compliance with them would mean the Code of ConductOutcomes would no longer be threatened e.g. if we are satisfied that our notified material interest approval requirements are likely not to be met by the imposition of conditions we would object to the notified interest. In contrast, the purpose of endorsements is to make it clear which legal activities a Licensed Body is authorised to undertake.10.3 Conditions placed upon the Licensed Body may result in it incurring expenditure and can include:

(i) a limitation of the types of non-reserved services it may provide

This condition will be imposed where the CLC is not satisfied that there are adequate arrangements in place to ensure the non-reserved activities are provided or supervised by suitably experienced or qualified staff;

(ii) a requirement that the body as a whole or a person within, or connected to it, takes a specific step, such as:

Where we consider a Non-Authorised Person’s material interest poses a risk to Authorised Persons’ duties we may approve the notified interest subject to conditionse.g. prohibited from engaging in the day-to-day activities of the business or exerting influence on any of the managers or employees to act, or refuse to act, for a particular person;

Improvements to be made to the body’s arrangements;

Targeted Continuous Professional Development for persons within the body (this may be the HoLP and/or the HoFA, as well as managers and/or other relevant staff).

10.4 Where arrangements need to be improved, the licence will only be fully endorsed when these improvements have been made and where they are to the satisfaction of the CLC.

10.5 In cases where conditions would not be appropriate due to the significance of the risk posed and/or where the body lacks the capacity or inclination to comply with the proposed conditions the licence application will be refused.

Licence Refusal

10.6 When refusing an application, the CLC shall notify the applicant of the grounds on which the refusal was made.

10.7 The CLC may refuse to grant a Licensed Bodylicence where it is not satisfied that the business is able to comply with the CLCLicensed Body Code and presents a significant risk to the delivery of positive ClientOutcomes. Factors which could determine such a decision include:

A material interest causes significant concern which cannot be mitigated through conditions;

The conditions imposed by the CLC upon which a licence would be issued have not been met;

The body’s arrangements make it vulnerable to improper influence;

The body has not provided the application information requested, or has provided incomplete, or false or misleading information;

Concerns that the proposed HoLP/HoFA/owner(s) is not fit and proper for their proposed role have not been resolved by mitigating measures and there is no suitable substitute;

Indemnity insurance provisions do not provide suitable protection for Clients The Compensation Fund contribution required has not been made;

Fees owed to the CLC have not been paid.

10.8 The CLC shall notify the applicant of the grounds on which the application has been refused and their right for this to be reviewed.

Regulatory Responsibilities of a Licensed Body (ABS)11.1 All entities regulated by the CLC must comply with the Code of Conduct. The aim of the Code is to help promote the regulatory objectives. All applications will be assessed against the body’s capability and capacity to deliver the Code’s Outcomes and to comply with its Overriding Principles.11.2 All the other CLC Codes are designed to ensure those we regulate deliver the Code of Conduct’s Outcomes. We require applicant bodies to provide us with a Compatibility Statement concerning the Code of ConductOutcomes and Licensed Body Code and any steps taken to address any identified issues e.g. a Non-Authorised Person with a material interestis subject to other duties which could potentially conflict with the Code of Conduct’s Overriding Principles. Wherever appropriate or possible we will work with an applicant to address an issue which has been reported to us.11.3 No licensable body will be licensed as a CLCLicensed Body until we are
satisfied that their application demonstrates that the body will meet these regulatory responsibilities and deliver the Code of Conduct’s Outcomes.11.4 All of our regulatoryarrangements are set out in the CLC Handbook, an electronic copy of which is available on the CLC website: http:www.clc-org.uk/A hard copy of this document will be available to those unable to access an electronic copy.Improper Influence11.5 We will always investigate allegations of improper influence and where we are satisfied there is evidence of this we will follow our Enforcement Policy (please see the CLC Handbook).11.6 Should a HoLP need to report improper influence they should do so to the CLC Authorised Officer

Material interests

11.7 As identified in the Licensed Body Code persons proposing to take a step which would result in them acquiring a material interest in a Licensed Body must notify both the Licensed Body and the CLC of this. A person with an existing material interest acquiring an additional kind of material interest must do the same.

11.8 Any proposed Non-Authorised Person with a material interest (of 10% or more) of a CLCLicensed Body will be given temporary pre-approval of their notifiable interest for an initial period of 90 ays during which time the status of the body’s licence will become temporary. The approval will become permanent only when the CLC has judged them fit to own. The 90 day determination of whether to approve, place conditions (or further conditions) on, or object to, an interest gives us sufficient time to analyse the information provided and to properly consider all relevant issues to determine what the appropriate approach should be. Failure to respond promptly to requests for information may result in a delay in determining the application, or in exceptional circumstances in the application being refused.

11.9 If a person had no knowledge of the facts that led to this (such as on inheritance of shares) they must inform both us and the body within 7 calendar days upon possessing such knowledge.

11.10 Failure to notify a proposed step, or an actual acquisition, is a criminal offence which upon conviction could result in a fine. If we are notified of a proposed step and the person subsequently takes the step without our approval they are liable on summary conviction to a fine and a conviction on indictment to a term of imprisonment or a fine (or both).

11.11 We will consider representations made regarding our stated intention to impose conditions or object. These will be considered within 28 days of issue of the notice. Should we then approve the material interest subject to conditions we will issue both the applicant body and the investor with a notice specifying the reasons for the conditions, their nature, and explaining that we could ultimately divest the person of their material interest if it is judged necessary in the interests of the public and Clients to do so.

11.12 In a partnership a Non-Authorised Person’s material interest which is not approved by us does not make it unlawful for the partnership’s business to be carried on or for the partners to carry it on in partnership.

Monitoring12.1 The factors which determine our regulatory relationship with the bodies and persons we regulate are set out in the CLC Regulatory Policy. We systematically collect information to help us monitor how effectively our regulatoryarrangementsare operating. All CLC regulated entities are required to submit data into our secure online Management Information System. The information held on this system is analysed and helps inform our regulatory profiling. We may require you to provide us with information (such as reconciliation statements) on a periodic basis to satisfy us that your declared systems are in place and are operating satisfactorily.12.2 All entities regulated by the CLC are required to submit an annual information form. The data the Licensed Bodies are required to provide includes:

HoLP and HoFA, Managers, owners and Authorised Persons (including any changes in their circumstance); < >/HoFAContinuing Professional Development Records;Who is involved in dealing with and managing ClientMoney;

12.3 According to the risk posed by the body we may require information more frequently (and more varied). This will only be requested when justified by risk assessment. Our investigation may include an inspection which may be carried out remotely or through a site visit.

CLCEnforcement Powers

13.1 All Licensed Bodies and their stakeholders must comply with our regulatory arrangements at all times. Where a non-compliance issue is identified we will always seek to resolve it informally in the first instance. Where this has failed or where the severity of the risk renders this inappropriate, we will take formal enforcement action. We always seek to ensure our enforcement response is proportionate to the risk identified. We have a number of statutory powers available to us to protect the interests of the public and Clients. These powers can be exercised against the Licensed Body itself or an owner, manager or employee of it (or all of these individuals) and can be used in isolation or in conjunction.

13.2 Where an issue has been identified the CLC will provide you with a warning notice* to inform you of the action we intend to take as a result, why it is considered necessary and when the Notice will come into effect. You will be able to make representations to us concerning our intentions.

13.3 The CLC Regulatory Policy explains what we as a regulator of legal services are seeking to achieve and how our regulatory philosophy is put into practice. The CLCEnforcement Policy explains how we identify and respond to non-compliance with our regulatory requirements and the factors which determine the form our response takes.

13.4 *The exception to this is where intervention is deemed necessary.LicenceConditions

13.5 In addition to any endorsement (see 8.34), we will impose conditions upon a licence where we consider additional safeguards are needed to protect Clients. Conditions include:

Requiring the body as a whole or a person within, or connected to it, must take a specific step e.g. where the CLC is not satisfied that the HoLP or HoFA remains ‘fit and proper’ for the role, we may withdraw our approval of that individual (requiring another individual be designated for the role);

Limiting the duration of the licence(applied only in exceptional circumstances and in conjunction with other conditions e.g. in the event of the running down of a practice).

13.6 Conditions may be imposed in the granting of a licence or at any stage in a licence’s duration. We may impose further conditions or adopt other enforcement measures if conditions are not complied with.

13.7 Conditions are likely to be time-bound. The period within which they must be complied with will be stated on the re-issued licence.

Financial Penalties

13.8 We may impose a financial penalty upon a Licensed Body, and/or one or more of its Managers or employees. We are likely to issue a financial penalty when behaviour is inappropriate and needs changing to deter future non-compliance. We will determine if the act or omission was deliberate, the impact (potential or actual) of the behaviour on a Client, or Clients in general, the reputation of the legal services sector, whether the breach was a one-off or a repeated issue and the attitude of the individual or body, to determine if a financial penalty could be considered an appropriate action and if so, the appropriate level. The penalty will be proportionate to the breach and take account of the resources of the Licensed Body.

13.9 The Legal Services Board (LSB) has set the maximum penalty thresholds for a Licensed Body and an individual within it at £250 million and £50 million respectively.

13.10 We do not profit from a financial penalty; the payment is made into the Government’s Consolidated Fund.

Disqualification

13.11 Disqualification is a serious sanction. If a HoLP, HoFA, manager or employee is found to have intentionally, or through neglect, significantly breached their duties, or caused, or substantially contributed to a significant breach of the licencetermsor its conditions they may be disqualified from holding that post, or any role, in any Licensed Body. A disqualified individual may apply for the disqualification to be terminated only when 12 months have passed since they were disqualified.

13.12 The LSB will maintain a list of those individuals who have been disqualified to ensure that people who are disqualified from involvement in the provision of legal services are kept from further harming the public. We will notify the LSB – within 7 days of these events – of a determination to disqualify, the results of any review, if one is requested, and any decision that the disqualification should cease to be in force.

13.13 The list of disqualified persons will include the following information:

Full name

Other names known by

Date of birth

Type of disqualification (as a manager, employee, HoLP, or HoFA)

Date of disqualification decision

Review date

Result of review

Cessation of disqualification

Name of the Licensed Body they were previously employed by, or manager of

13.14 The LSB maintains a similar list of the persons Licensing Authorities have objected to owning a material interest, who have had conditions placed on it, or for whom a divestiture application has been made.

Divestiture

13.15 Where there are improper influence concerns regarding a material interest holding we will act. Our enforcementresponse may take the form of conditions or an objection, or could result in a Restriction Notice and ultimately divestiture. We will issue a Restriction Notice where a person has a material interest shareholding in a body corporate with a share capital and:

they are a Non-Authorised Person who has acquired that interest without having secured our approval of that holding; or

the conditions imposed (Conditional Approval of Notified Interest) upon that interest have been breached; or

our objection to the interest has been disregarded.

13.16 The Notice will advise you of our intention to apply to the High Court for the holding to be divested if at the end of the period prescribed in the Notice the divestitureconditions (identified above) still apply. The Notice will direct that the relevant shares are until further notice – i.e. until the High Court makes an Order; we decide not to apply for an Order; or the body ceases to be licensed by the CLC – made subject to one or more of the following restrictions:-

a transfer (or agreement) of shares or the right to be issued with them is void;

voting rights are not exercisable in respect of the shares;

no further shares are to be issued to or in pursuance of any offer made to their holder; and

no payment is to be made of any sum due from the company on the shares (except in a liquidation).

13.17 The material interest holder will be given the opportunity to make representations for the action not to be taken.

13.18 We will notify the LSB of any objections/conditions imposed, varied or cancelled, any Restriction Notice issued, as well as the outcome of any subsequent review or appeal. We will also notify them if we approve the holding of a person included in this list and provide reasons for that decision. The Notice will state the reasons for the action taken. We will issue a copy of the Notice to both the individual investor and the Licensed Body.

13.19 If the High Court is satisfied that the divestiturecondition is met it may order the sale of the shares so the Non-Authorised Person will no longer have a material interest (if they hold more than one type of interest, the interest to which the divestiturecondition applies is satisfied). No such Order will be made as a result of breach of conditions or of an objection until the end of the period within which an appeal could be made, or if such an appeal is made, it has been determined or withdrawn. Where an Order is made, the proceeds of the sale (less the sale costs) must be paid into court for the benefit of the persons beneficially interested to them.

13.20 Alternatively, in the case of notified interest conditions being breached the High Court may order compliance with the conditions.

Suspension and/or Revocation of a body’s Licence

13.21 The decision to suspend or revoke a licence will not be taken lightly.We will only
use this measure where, due to the seriousness and/or persistence of the act or
omission no other enforcement action is judged adequate to address the identified
issue.

13.22 A licence may be suspended or revoked if:

The body changes its structure and/or arrangements so it is no longer a Licensed Body;

A Reserved Legal Activity is not carried out by an Authorised Person entitled to carry out that activity;

An employee/manager/non-Authorised Person with material interest causes or substantially contributes to the Licensed Body breaching our regulatory arrangements, or one of its Authorised Personmanagers or employees to breach their regulatory duties;

The Licensed Body, or one of its Authorised Personmanagers/employees, breach its/their regulatory responsibilities;

The body employs a person disqualified from being a manager/employee of a Licensed Body as a manager/employee and that person was disqualified for breaching their duties (as set out at c) & d));

The Licensed Body does not have a designated Head of Legal Practice or Head of Finance & Administration approved by the CLC;

A Non-Authorised Person with material interest has not notified us of their interest;

A Non-Authorised Person with material interest is in breach of the conditions (or further conditions) we have placed upon the (notifiable or existing) interest;

We have objected to the (notifiable or existing) holding of a Non-Authorised Person’s material interest;

The Licensed Body is in breach of the terms or conditions applicable to its licence if the breach is incapable of being remedied or has not been remedied within a reasonable period;

The Licensed Body is the subject of an allegation or complaint which, if substantiated, is likely to have serious implications for that body.

13.23 Licence suspension will not automatically result in licence revocation. We may end the suspension where we (or the FTT) are satisfied that to do so would not present a risk to Clients. Where this is the case, the body may be subject to a more intensive regulatory relationship to ensure the risks are kept to a minimum.

13.24 A CLCLicensed Bodylicence will also cease to have effect if the body is issued with a Licensed Bodylicence by another Licensing Authority.

Intervention

13.25 Where a body’s licence has suspended or revoked or the CLC is satisfied that one or more of the following conditionsapplies:-

The licenceterms are not being complied with;

Persons have been appointed receiver or manager of the Licensed Body’s property;

A relevant insolvency event has occurred;

We have reason to suspect a Manager’s or employee’s dishonesty in connection with the Licensed Body’s business, any related Trust or the business of another body in which a Manager or employee is or was employed;

Undue delay* by the Licensed Body in any matter in which it is/was acting for a Client or with any related trust;

Undue delay* by a Manager or employee in connection with any trust of which that persons is/was a trustee (in their capacity as such a Manager or employee)

It is necessary to protect the interests of Clients or the beneficiaries of a related Trust.

We may exercise our powers to intervene in the business. As set out in our Regulatory Policy (please see the CLC Handbook) we would only take this action where the interests of Clients have been seriously compromised or are at grave risk of being seriously compromised, and where no other enforcement action is judged adequate to address a serious and or persistent issue, or if the body’s viability is threatened or it becomes insolvent. This power can be invoked even after the Licensed BodyLicence has ceased/been revoked.

13.26 *The undue delay conditions apply only where we have given you a notice inviting you to explain the reason for the undue delay and you have not provided an explanation we are satisfied with within the period specified in the notice. In such cases you will be given notice of the failure and advised that intervention will take place.

Intervention – Applications & Orders

13.27 Where it is judged that intervention is the appropriate measure we can apply to the
High Court for the following Orders to be made:

Prohibiting the payment of money by a person or financial institution holding money on behalf of the Licensed Body;

Recovery or receipt of money held by or on behalf of the Licensed Body (in connection with its Licensed Body activities or a trust);**

Information about and identification of money and accounts held;

Production/delivery of documents (this may ultimately result in an appointed person being authorised to enter any premises to search/take possession);

Communication redirection (this may ultimately result in steps being taken in relation to a website of the Licensed Body);

Appointment of a new or substitute trustee (where the Licensed Body or any of its employees or managers is a trustee of a trust);

Liable party to payment costs incurred due to CLCintervention activities.

13.28 We must inform you of our intention to do so via a Notice. If an application is agreed the High Court will make an Order to that affect. The Order will take effect once we have provided you with a copy of it.

13.29 ** The sums of money and the right to recover or receive them will vest in us and are held by us on trust and for the persons beneficially entitled to them.

13.30 Where we intervene in a body we will suspend or revoke a licence (though we will not intervene in all cases where a licence has been suspended or revoked)

Licence Modification

14.1 We will not issue any automatic waivers of regulatory arrangements; a body wishing to have a responsibility waived will need to make a specific application. A Licensed Body is entitled at any time to apply for a modification of its licencetermsor conditions. If the modification concerns removal of licenceconditions it is unlikely that an application will be successful if it is made within 12 months after the terms or conditions have been imposed, unless there are exceptional circumstances. (The 12 month exemption period does not apply to conditions which are time-bound). It is a matter for the Licensed Body to satisfy the CLC that the condition should be removed.

14.2 A body wishing to modify its licenceterms, endorsements or conditions must complete the appropriate CLC form and provide us with evidence to justify the modification. The standard modification fee will be £320. This is cost-reflective of the 4 hours we judge will be required to assess the modification application. We reserve the right to charge additional amounts above the standard fee for particularly complex applications which take more than the expected time. These will be charged at £80 per hour. The request will be determined by the CLC Authorised Officer. The determination will be made within 28 days of receipt of the complete modification application.

14.3 The CLC will only modify licence terms, endorsements or a condition without obtaining consent from the affected body or individual where there is an evidenced need to do so, for example:

There has been a change in legislation or in our regulatory arrangements which impacts upon the terms of the licence;

Where a licencecondition is only to have effect for a period of time, that period has expired – we may decide to remove the condition if we are satisfied it is no longer applicable, or where we believe there are good reasons to do so we may extend the period the condition is to have effect;

The CLC is satisfied any condition or endorsement in force is no longer applicable – we may decide to remove the condition or endorsement or to substitute it with a further condition or endorsement which in the circumstances of the case is more likely to address the regulatory concerns we have identified;

We have identified a significant and/or immediate risk to Clients which justifies the imposition of a condition(s) or endorsement(s) for the protection of Clients or it is consistent with the regulatory objectives for a condition(s) or endorsement(s) to be imposed as a matter of emergency pending a more detailed investigation, particularly if the alternative would be to require the body to cease trading.

14.4 We will modify the terms, conditions or endorsements of the licence by giving the Licensed Body written notice. The modifications will have effect from the time we give the notice, or such later time as the notice may specify.

Review/appeal of CLC determination/enforcement

15.1 An individual or Licensed Body who is dissatisfied with any CLC licensing or enforcement determination e.g.:

Refusal of application for a licence;

Any endorsement or condition imposed on a licence;

Modification of a licence;

Refusal to designate as Head of Legal Practice, or withdrawal of approval;

Refusal to designate as Head of Finance and Administration, or withdrawal of approval;

Disqualification from some or all of the roles within a Licensed Body;

Suspension and Revocation of licence;

A financial penalty i.e. its imposition, the amount and/or the payment
timescales;

Imposition of conditions on or objections to a holding.

may appeal against the determination. The respondent must submit an appeal to the CLC within 28 days of being notified of the determination.

15.2 The Adjudication Panel (with a quorum of 3) will determine when it is appropriate to impose sanctions – such as disqualification of the Body or a Manager, licence revocation or imposition of a penalty.

15.3 No member of the Adjudication Panel is a member of the CLC Council or an employee of the CLC.

15.4 Wherever possible the applicant making the appeal will be provided with the decision of the Adjudication Panelwithin 42 days of receipt of the request for the appeal. The CLC reserves the right to extend this to 90 days where needed.

First-Tier Tribunal

15.5 Having been notified of the determination made by the Adjudication Panel, the applicant may appeal to the First-Tier Tribunal (FTT). The FTT provides a general right of appeal wherever an individual or ABS does not accept the CLC’s decision. It will hear appeals only from those who have exhausted their resolution options within the CLC, or where the CLCAdjudication Panel has not met its published timescales. Unless otherwise directed by the FTT, the appeal request must be made within 28 days after the determination was sent to the applicant, or within 14 days after expiry of the time for the Adjudication Panel to determine an appeal.

15.6 The FTT is an independent public body, established under the Tribunals, Court and Enforcement Act 2007. The General Regulatory Chamber of the FTT will hear the appeal. This will constitute a substantive re-hearing of the issue and its determination. Appeals will be heard by a Committee of a legally qualified chairperson and a lay member.

15.7 The FTT can reach any decision which the CLC could have made and can:

Affirm the CLC decision wholly or in part;

Quash the CLC decision wholly or in part;

Substitute the whole or part of a CLC decision with a new decision of a kind the CLC could have made;

Remit the matter to the CLC (generally, or for determination in accordance with a finding made or direction given by the Tribunal).

15.8 Subject to its Procedure Rules, the First Tier Tribunal is likely to award costs only where it considers a party has acted unreasonably.

15.9 There is a right of onward appeal to the Upper Tribunal on any point of law arising from a decision made by the First-Tier Tribunal.

Consistency of determinations

15.10 After operating as a Licensing Authority for six months we will assess the consistency of our licensing determinations – including the circumstances in which conditions are made and how often – to ensure we are employing a consistent approach. This quality control exercise will be carried out every year after to ensure our licensing approach is consistently applied. With the approval of the LSB we shall make such changes as we consider necessary in the light of these assessments.

Transfer and Continuity of Licences

16.1 No change permitted under requirement 16 is effective unless and until it has been approved by the CLC with or without conditions and any fee (as provided by requirement 7) has been paid. Depending on the nature of the change proposed, the CLC may require the Body or any of its HoLP, HoFA, Non-Authorised Persons with a Material Interest or Managers to comply with some or all of the provisions of requirements 4 and 8.

16.2 In addition to the requirements of the Notification Code, we must be promptly informed of all such vacancies or changes and we must be provided with full and complete details of the new relevant person so that we can determine/approve their appointment.

16.3 In a Limited Liability Partnership of two Members, if one of them:

is committed to prison in civil or criminal proceedings; or

is unable, because of incapacity caused by illness, accident or age, to attend to the body for a period of more than 14 days (or such other period as the CLC may determine); or

Lacks capacity (within the meaning of the Mental Capacity Act 2005) and powers under sections 15-20, or section 48, of that Act have been exercised in relation to him; or

abandons the body; or

has a licence issued by the CLC subject to a condition which would be breached by continuing as a LLPMember; or

is not a CLC lawyer ; or

dies,

the Licence will continue in full force and effect provided the remaining LLPMember is an Authorised Person, and within 28 days of the occurrence an additional person has become an LLPMember. We may extend the 28 day period (up to a maximum of 120 days) upon the Licensed Body’s request.

16.4 Where the Head of LegalPractice or the Head of Finance and Administration:

is committed to prison in civil or criminal proceedings

is unable, because of incapacity caused by illness, accident or age, to attend to the body for a period of more than 14 days (or such other period as the CLC may determine)

lacks capacity (within the meaning of the Mental Capacity Act 2005) and powers under sections 15-20, or section 48, of that Act have been exercised in relation to him

leaves the Licensed Body

has a licence issued by an Approved Regulator subject to a condition which would be breached by continuing as a Head of Legal Practice or Head of Finance and Administration

dies.

the licence will only continue in full force and effect provided an appropriately qualified and suitable replacement is in place within 28 days of the occurrence. We may extend the 28 day period (up to a maximum of 120 days) upon the Licensed Body’s request.

16.5 Where there is a change in ownership in a Body the effect of which is that:

a Non-Authorised Person acquires a Material Interest in a Body (or there is a change of 10% or more in the Material Interest a Non-Authorised Person has in a Body); and/or

a Body ceases to exist and another entity (which may be a Body) succeeds to the whole or substantially the whole of that Body’s businessthe CLC may determine that:

the licence of the Body continues in effect (with or without such Authorisations, Permissions and/or Conditions as the CLC may determine)

the licence of the Body is transferred to the entity which has succeeded to the whole or substantially the whole of that Body’s business (or to another person approved by the CLC) and that licence has effect with or without such Authorisations, Permissions and/or Conditions as the CLC may determine, or

a temporary licence is issued to the Body or to the entity which has succeeded to the whole or substantially the whole of that Body’s business (or to another person approved by the CLC) for a period of up to 90 days and that the temporary licence has effect with or without such Authorisations, Permissions and/or Conditions as the CLC may determine.

16.6 If the above requirements are not met the licence may have effect with or without such Authorisations, Permissions and/or Conditions as the CLC may determine, be suspended, cease to have effect or be revoked.

Other17.1 Any CLC document served on a licensable or Licensed Body (ABS) under our regulatory arrangements will be posted to its principal office in the United Kingdom.

[1] The 29th May 2013 amendment to the Rehabilitation of Offenders Act 1974 allows that certain old minor cautions and convictions are no longer be subject to disclosure.

Compensation Fund Operating Framework

As a condition of being authorised by the CLC, a body must make a contribution to the CLC Compensation Fund at such time and of such an amount as determined by the CLC. The CLC may require a body to make a further contribution towards the Fund at any time.

In its absolute discretion the CLC may agree that a contribution to the Fund is paid by instalments which become immediately payable on the date specified by the CLC. If any instalment is not paid by the due date the balance of contributions the body owes will be recoverable as a debt owed to the CLC.

Purpose of the Fund

The CLC shall place the money constituting the Fund in a separate designated accountentitled “Council for Licensed Conveyancers’ Compensation Fund”.

As trustee the CLC may:‐

invest the money constituting the Fund in such a manner as it thinks fit;

borrow for the purposes of the Fund, and may charge any investments of the Fund by way of security for such a loan;

take out insurance with Authorised Insurers for such purposes and on such terms as it deems appropriate to the Fund.

The Fund will be credited with:‐

all contributions paid to the CLC;

all interest, dividends and other income and accretions of capital arising;

the proceeds of any realisation of the investments of the Fund;

all money borrowed for the purposes of the Fund;

all money recovered by the CLC either directly or following the assignment to the CLC of the rights of any Claimant;

all recoveries under any insurance policy effected by the CLC;

any other money which may belong to or accrue to the Fund or be received by the CLC in respect of the Fund.

All of the Fund’s money and investments are applicable for:‐

payment of costs of establishing, maintaining, administering, protecting and applying the Fund;

payment of any CLC insurance premiums or any premium relating to run off cover following the closure of a body;

the purpose of settling any claim in respect of CLC insurance or any other claim relating to run off cover following the closure of a body;

repayment of any money borrowed by the CLC for the purposes of the Fund, for payment of interest on any money so borrowed, and for reimbursing the CLC for any costs incurred in that respect;

making grants or other payments the CLC determines should be paid out of the Fund (whether such grants or other payments relate to practices regulated by the CLC as a Recognised Body or a Licensed Body);

the refund of contributions to a body which ceases to be regulated by the CLC (the CLC may at its discretion refund a proportion of a contribution made in respect of any unexpired period).

Where it has passed a resolution under paragraph 6 schedule 5 to the 1985 Act the CLC may credit to the Fund any sum vested in it as a result of the passing of such a resolution.

Where it has passed a resolution under paragraph 6A schedule 5 to the 1985 Act the CLC may credit to the Fund any sum vested in it under paragraph 6A(3) of schedule 5 to the 1985 Act.

If the Rightful Recipient contacts the CLC after a credit has been made to the Fund under a resolution the CLC will treat the Rightful Recipient as a Claimant and invite them to make a claim under this Code out of the Fund.

Making a Compensation Claim

The CLC may in its absolute discretion make a grant or other payment out of the Fund for the purpose of relieving or mitigating loss which the CLC is satisfied any person has suffered or is likely to suffer in consequence of:

negligence or fraud or other dishonesty on the part of a licensed conveyancer, or their employees or associates in connection with their practices (or purported practices) as licensed conveyancers; or

failure on the part of a licensed conveyancer to account for money received by them in connection with their practices (or purported practices) as licensed conveyancers;

the negligence, fraud or other dishonesty on the part of a body or of any of its employees or managers in connection with its practice (or purported practice) as a CLC Recognised Body or CLC Licensed Body;

the failure on the part of a body to account for money received by it in connection with its practice (or purported practice) as a CLC Recognised Body or CLC Licensed Body.

Where making a claim for a grant the Claimant must complete, sign and deliver to the CLC a notice of claim in the form required by the CLC. Such notice shall provide for:‐

the assignment to the CLC of all rights of action the Claimant has against the Respondent Body or any other person liable for the loss;

retention by the Fund of all money recovered by the CLC whether or not in excess of any grant made by the CLC to the Claimant after deduction of the Costs incurred by the CLC in making such recoveries;

the Claimant to covenant to do all such further things and produce such documents as may be required by the CLC for the purpose of pursuing any claim against the Respondent Body or any other person liable for the loss.

Where the Claimant requires assistance in completing a notice of claim this will be provided.

The Claimant must deliver the claim to the CLC within 6 months (or such longer period as the CLC may allow in a particular case) after the loss or likelihood of loss first came or should reasonably have come to their attention.

The Claimant must deliver any subsequent claim to the CLC within 56 days of the making of the grant (or the date of receipt of notification by the CLC that no further grant is to be made beyond that made by way of interim grant or grants).

On receipt of a claim the CLC may require the Claimant to:‐

support their claim with a statutory declaration;

produce any relevant documents; and

assist with any enquiries the CLC thinks fit to pursue.

Where a grant has been made and they wish to seek an additional grant in respect of interest or costs, the Claimant must submit a notice of claim. A claim for both interest and Costs may be made in a single application.

The CLC may in its absolute discretion waive any requirement under requirements 9, 14 and

Determining Claims

Without limiting its absolute discretion the CLC may take into account when deciding whether a claim for a grant should be paid in full, reduced or rejected:‐

whether the Claimant has complied with 12‐13, and if appropriate, 14;

whether sufficient information has been provided in a reasonable timescale in support of the claim;

whether the Claimant: ‐

has any responsibility for the loss, or

directly or indirectly hoped to profit or did profit, whether wholly or otherwise, from the circumstances giving rise to the loss;

whether the Claimant is protected in respect of their loss by any other scheme or any contract of insurance or indemnity or guarantee;

whether the Claimant has recovered damages or compensation in respect of the loss which had been suffered including any interest recovered as a result of any available civil remedy or in criminal proceedings or is likely to make such recovery in the future;

the assets available to the Fund;

any representations made to the CLC by the Respondent Body, their personal representative, trustee in bankruptcy or the liquidator of the body;

whether any statutory limitation period has expired;

whether the Claimant has taken all reasonable steps to mitigate loss;

whether the claim has been exaggerated by the Claimant;

whether the CLC has reason to suspect fraud or other dishonesty on the part of the Claimant in respect of the loss or in respect of the claim.

The CLC may make interim or final payments by way of a grant or grants at any time before, during or after an investigation of a claim against a Respondent Body. It will only do so when it is satisfied that the payment falls within the circumstances for which a grant may be made under this Code.

The CLC will consider such a claim in its absolute discretion may make an additional grant or grants out of the Fund under this provision as follows:

in lieu of interest on the amount of a grant for such a period and at such rate as determined at the CLC’s discretion;

a sum in respect of the amount of reasonable costs incurred by making a claim wholly and exclusively in connection with the preparation, submission and proof of a claim.

The CLC may before deciding whether or not to make a grant require a Claimant to pursue any civil remedy which may be available in respect of the loss.

Where the CLC refuses to make a grant of either the whole or part of the amount claimed the CLC shall inform the Claimant in writing of the reason for its decision within 28 days of that decision.

The Claimant has the right to request a review of the decision by the CLC Adjudication Panel. The request must be made within 28 days of being notified of the decision.

Recovery of monies paid out of the Fund

The CLC shall not make a grant unless it has caused a letter giving notification of the claim or additional claim to be sent to the Respondent Body at the last known correspondence address or to any solicitor or other representative instructed by the Respondent Body or appointed on its behalf or in its stead and in any case not less than 8 days have elapsed since the date of such letter.

The CLC may take proceedings against the Respondent Body to recover the amount of any grant or other payment made in consequence of the act or omission of that Respondent Body in accordance with this Code:

provided no other civil proceedings for recovery in respect of the same cause of action have already been issued;

even if it is not possible to obtain an assignment of the cause of action from or on behalf of the Claimant.

The CLC may in its absolute discretion take proceedings against a Manager or former Manager of a Respondent Body to recover the amount of any grant or other payment made in accordance with this Code.

Any sum payable as a result of proceedings taken against a body, Manager or former Manager is recoverable as a debt owed to the CLC.

Continuing Professional Development Framework

Set out below is the framework the CLC complies with in Continuing Professional Development (CPD) provisions. These are provided to inform the regulated community of the parameters the CLC operates within to ensure providers of legal services continue year on year to develop their professional knowledge and competency.

The CLC may issue a licence subject to conditions where the applicant fails to comply with requirements 8 to 11 of the Continuing Professional Development Code.

The minimum requirements of continuing education and training in recognised courses areFor a CLC lawyermanager in each year in which a licence is held:

12 hours if they hold only a conveyancing or probate licence

16 hours if they hold a a compositelicence (e.g. conveyancing and probate);

For a CLC lawyer, other than a manager, in each year in which a licence is held:

6 hours if they hold only a conveyancing or probate licence

8 hours if they hold a composite licence (e.g. conveyancing and probate);

On application the CLC may, where satisfied that the CLC lawyer concerned has undertaken sufficient continuing professional development in the current year, vary the operation of the CPD Code in such ways as it thinks fit.

The CLC has power to approve courses of study provided by educational institutions and other bodies.

The CLC may provide its own courses of study for the purposes of the CPD framework and Code and may prescribe and charge a fee where a person is directed to attend or applies to attend or undertake such a course.

The CLC may direct an individual to attend (and pay for) a specific course as an alternative to disciplinary action if it is satisfied they have failed to a material extent to comply with the CLC’s Code of Conduct, even if they have at that time satisfied the provisions of paragraph 2 for the current year.

Continuing Professional Development requirements will be allocated to each licence in order that the CLC is confident that training relevant to the licence is acquired.

Licence holders are required to annually submit a self-certification CPDtraining record. These will be monitored with a view to ensuring compliance. This monitoring will help inform our risk assessment of the individual/body. The CLC will operate an escalating system of sanctions.

Fees Framework

The CLC Fees Framework 2016

Made 7 September 2016 by the Council for Licensed Conveyancers with the approval of the Legal Services Board in accordance with s.14, 32 and 38 Administration of Justice Act 1985 and s.51 Legal Services Act 2007.

This Framework may be cited as the CLC Fees Framework 2016 and shall come into force on 1 November 2016 on which date the Council for Licensed Conveyancers’ Fees Rules 2012 shall cease to have effect.

“CLC Body” is a Recognised Body or a Licensed Body regulated by the CLC.

LICENSED CONVEYANCERS

The fees payable as provided by the CLC Lawyer – Licensing Framework shall be as follows: –

under paragraph 1(a)(ii) for the issue of a licence:for the first time, or where such a licence is not in force at the time of the application (and has not been in force for at least 12 months prior to that date): £150;to provide Conveyancing Services or Probate Services: £400to provide Conveyancing and Probate Services: £475;

under paragraph 16 and 18 for an amendment to a licence: £75;

under paragraph 26 for a duplicate licence, where chargeable: £50.

The additional fee of £100 is payable for failure to submit an Accountant’s Report within the time limited (see paragraph 16.2 of the Accounts Code and Guidance).

shall be the turnover declared by the CLC Body for the purpose of determining the applicable annual premium payable in accordance with 10.1 of the CLC Professional Indemnity Insurance Code & Guidance as follows:

Turnover Banding

Practice Fee payable

From

To

Minimum Fee in Band

0 and

100,000

856

or

1.2%

Of Turnover

Whichever is the greater

From

To

Minimum Fee in Band

On Turnover in excess of

100,001

500,000

1,200

plus

1.1%

100,000

500,001

3,000,000

5,600

plus

1.0%

500,000

Over

3,000,000

30,600

plus

0.9%

3,000,000

Turnover Banding and Practice Fee payable

From 0 To 100,000 Minimum Fee in Band : 856
or 1.2% Of Turnover
Whichever is the greater

From 100,001 To 500,000Minimum Fee in Band : 1,200 plus 1.1%On Turnover in excess of : 100,000

From 500,001 To 3,000,000Minimum Fee in Band : 5,600 plus 1.0%On Turnover in excess of : 500,000

Over : 3,000,000Minimum Fee in Band : 30,600 plus 0.9%On Turnover in excess of : 3,000,000

Compensation Fund Contribution

The Compensation Fund contribution payable by a CLC Body as provided by

shall be the turnover declared by the CLC Body for the purpose of determining the applicable annual premium payable in accordance with paragraph 10.1 of the CLC Professional Indemnity Insurance Code & Guidance as follows:

Turnover Banding

Compensation Fund contribution

Minimum Fee in Band

Between

0 and

£100,000

£500

Minimum Fee in Band

On Turnover in excess of

Between

£100,001 and

£500,000

£500

plus

0.4%

£100,000

Between

£500,001 and

£3,000,000

£2,100

plus

0.3%

£500,000

Over

£3,000,000

£9,600

plus

0.2%

£3,000,000

Turnover Banding and Compensation Fund contribution

Between 0 and £100,000Minimum Fee in Band : £500

Between £100,001 and £500,000Minimum Fee in Band : £500 plus 0.4%On Turnover in excess of : £100,000

Between £500,001 and £3,000,000Minimum Fee in Band : £2,100 plus 0.3%On Turnover in excess of : £500,000

Over £3,000,000Minimum Fee in Band : £9,600 plus 0.2%On Turnover in excess of : £3,000,000

WAIVER

The CLC may in writing waive or vary any of the provisions of this Framework and may revoke any waiver in any particular case.

CLC Lawyer Licensing Framework

This Framework seeks to ensure that only those individuals able and committed to delivering the CLC’s Code of Conduct’s Outcomesfor Clients are awarded a PractisingLicence.

To achieve this, the CLC will only license individuals able and willing to act in a principled manner and deliver the CLCCode of Conduct’s Outcomes by complying with its Overriding Principles:-

Act with independence and integrity;

Maintain high standards of work;

Act in the best interests of Clients;

Comply with your duty to the court;

Deal with regulators and ombudsmen in an open and co-operative way; and

Promote equality of access and service.

Applying for a Licence

An individual wishing to apply for a Licence

must deliver to the CLC’s offices:

a correctly completed application in the form prescribed by the CLC; and

the fee payable; and

the application must identify the authorisations and permissions sought (see item 5); and

if the applicant has not held a CLClicence before, they must satisfy the CLC they are a fit and proper person to practise as a CLC lawyer (see item 8.22 of the Licensed Body (ABS) Licensing Framework for an overview of the type of factors taken into account when applying the fit and proper test); and

must:

either have passed the CLC’s Qualifying Examination, and completed the CLC’s Practical Training requirements; or

demonstrate to the satisfaction of the CLC, and in accordance with such terms and conditions as may be prescribed, that they have the relevant educational and professional qualifications and experience in the provision of the reservedlegal activity or activities the subject of the application.

Issuing a Licence

If the CLC is satisfied as to the matters identified at requirement 1 and if then the CLC shall:

issue them with a Licence as provided at item 5; or

issue them with a Licence as provided at item 5 subject to such conditions as it considers appropriate

Conditions may result in the applicant/CLC lawyer incurring expenditure and include:

Limiting the types of Legal Activities they may provide;

Requiring them to take specific steps the CLC deems conducive to safeguarding the interests of consumers or other regulatory objectives.

If it is not satisfied of the matters set out at requirement 2, the CLC shall refuse the application.

Any Licence issued by the CLC will be endorsed with:

all authorisations that it grants the individual to carry on reserved legal activities (“the authorisations”);

all permissions that it grants the individual to provide non-reserved legal activities (“the permissions”);

any conditions applicable to the exercise of the individual’s authorisations and permissions(“the conditions”); and

any condition imposed will take effect at the time the CLC directs.

the CLC will record on its register maintained under s19. of the 1985 Act:

the authorisations and permissions granted and any conditions imposed;

the licensee’s full name and your practising address; and

the date and time from which the Licence takes effect and its duration.

A Licence will be in the form prescribed by the CLC and will remain valid from the date specified for an indefinite period or for such period as is specified. A CLC lawyer will be entitled to undertake the Legal Activities set out in their Licence, subject to the condition that all regulatory fees have been paid as and when due, and that no order is made or condition imposed which affects their continuing entitlement to provide all (or any) of the Legal Activities set out in their Licence. A CLC lawyer wishing to renew their licence must apply to do so one month before its expiry.

Practising as the holder of a Licence

An individual can only practise as a CLC lawyer if they hold a Licence.

A CLC lawyer can only carry on your authorisations and permissions in their capacity as holder of a Licence.

A CLC lawyer must not carry on any reserved legal activity that is not within their authorisations.

A CLC lawyer can only carry on their authorisations and permissions

as a manager of a CLCBody; or

as a manager of a body recognised by a Approved Regulator or a Licensing Authority other than the CLC; or

as an employee of a CLCBody; or

as an employee of a body recognised by an Approved Regulator or a Licensing Authorityother than the CLC.

When carrying on their authorisations and permissions, the CLC lawyer must comply at all times with their conditions.

The individual must return their Licence promptly to the CLC if they cease to be eligible to remain a CLC lawyer, or if the CLC demand return of the Licence.

Whilst holding a Licence, the CLC lawyer must notify the CLC of any changes to the information they provided under requirement 1 within seven days of becoming aware of such changes.

Conditions on your Licence

At the time of issuing a Licence, or at any time subsequently, the CLC may, in its discretion, endorse the Licence with such conditions as it thinks fit, or remove any condition that has been imposed.

Where an endorsement is made to a Licence, or an endorsement that has been made is later amended or removed, then the CLC shall record this in the register.

If a CLC lawyer wishes to apply for the removal or amendment of any condition endorsed on the Licence, they must provide the CLC with a completed application and the fee payable.

Where a Licencecondition application has been made the CLC will notify the CLC lawyer of its decision within 42 days of its receipt of the application. If the applicant is not been notified of a decision within this period, the application will be deemed to have been refused.

When the CLC agrees to the removal or amendment of all or any of the conditions imposed, those conditions will remain effective until the Licence is delivered to the CLC’s offices together with the fee payable.

The CLC may refuse an application for the removal or amendment of a Licence condition if:

the CLC lawyer has not complied with item 1; or

it is not satisfied that the person remains a fit and proper person to practise with the removal or variation of such a condition on the Licence.

In any case where it decides to issue a Licence subject to conditions, to refuse an application for a Licence or to refuse an application for the removal or amendment of a condition on a Licence the CLC will notify the individual of the refusal of the application and of the grounds on which it has been refused.

Where a determination has been made under requirement 2, 4, 5 or 19, the applicant/ CLC lawyer may within one month of publication of the CLC’s determination appeal to the Adjudication Panel under section 29 of the 1985 Act.

If an application is deemed to have been refused as provided under requirement 17, the individual may within one month of the deemed refusal, appeal to the Adjudication Panel under section 29 of the 1985 Act.

Additional Information

Application

The CLC will treat a Licence application as having been made on the day on which the applicant has complied fully and finally with item 1.

In considering an application for a Licence the CLC may, at its discretion, require an applicantto attend for interview.

A condition may take effect immediately or at a future time, or it may not have effect until after any appeal in relation to it.

An applicant may, when applying for a Licence, apply in addition for a duplicate Licence which, if issued, shall be free of charge. If a CLC lawyer applies to the CLC at any other time for a duplicate Licence a fee is payable.

Professional Indemnity Insurance Operating Framework

The CLC’s requirement for all CLC regulated bodies to have professional indemnity insurance cover in place at all times provides protection to both CLC bodies and their Clients.

The CLC is authorised to set CLC PII Policy Terms for CLC Regulated Bodies and enter agreements with Participating Insurers for offering Professional Indemnity Insurance.. It requires Participating Insurers to issue Evidence of Insurance to the bodies who have professional indemnity insurance cover in place with them.

The CLC is entitled in respect of each CLC regulated body to:

exchange information concerning claims with Participating Insurers, their representatives or the Brokers;

require Participating Insurers, their representatives or the Brokers to deliver to the CLC details of the turnover declared;

receive any notification from Participating Insurers or the Brokers in accordance with requirement 10.5 of the Professional Indemnity Insurance Code.

Recognised Body Recognition Framework

This Framework seeks to ensure that only those firms able and committed to delivering the CLC’s Code of Conduct’s Outcomes for Clients are awarded a Certificate of Recognition.

To achieve this, the CLC will only license bodies able and willing to act in a principled manner and deliver the CLCCode of Conduct’s Outcomes by complying with its Overriding Principles:-

Act with independence and integrity;

Maintain high standards of work;

Act in the best interests of Clients;

Comply with your duty to the court;

Deal with regulators and ombudsmen in an open and co-operative way; and

Promote equality of access and service.

Structural Requirements

A Recognised Body may be established as a Sole Principal, partnership, a Limited Company or a Limited Liability Partnership provided all the Managers and owners are Authorised Persons.

A Recognised Body which is a Company must:

be registered in England and Wales under the Companies Acts; and

have its registered office in England and Wales and at the place, or one of the places of business of the Company.

A Recognised Body which is Limited Liability Partnership (LLP) must:

be registered in England and Wales under the Limited Liability Partnerships Act 2000;

have its registered office in England and Wales and at its place, or one of its places, of business;

have at least two LLPMembers.

At least one manager is a CLC lawyer.

Application for and Grant of a Certificate

Any applicant for a Certificate must:

deliver to the CLC offices:

a correctly completed application in the form prescribed by the CLC, signed by a Manager;

the fee payable;

evidence of or a quotation for professional indemnity insurance;

any contribution required towards the CLC’s Compensation Fund;

where the applicant is a Company the application must also be signed by the company secretary or a director and accompanied by a copy of its Memorandum and Articles and a declaration that they comply with this Framework; and

where the applicant is a Company or LLP, its application must include its certificate of incorporation; and

identify the endorsements for which application is made (see item 11)

The applicant must inform the CLC (with such additional information and documentation as the CLC may require) of any issues as a result of which may cause the applicant to fail to meet requirements 1-4, or:

If, as a Recognised Body, it has at any time had made against it:

one or more of the orders referred to in paragraphs 4(2), 4(2D) and 5(4) of Schedule 6 to the 1985 Act;

an order of the High Court made under paragraph 6(1) or 6(1A) of Schedule 6 to the 1985 Act;

If the issue of a Certificate will have, or is likely to have, an adverse effect on the delivery of positive Outcomes for Clients.so that these issues can be taken into account when the application is determined.

Determinations of applications for Recognised Body Certificates

If the CLC is satisfied as to the matters identified under items 5 and 6 and of the capability and willingness of the entity to comply with the CLCCode of Conduct and other CLC Codes, then the CLC will:

issue a Certificate endorsed as provided at item 11; or

issue a Certificate endorsed as provided at item 11, subject to such additional conditions as it considers appropriate.

Please see items 8.1-8.22 of the Licensed Body (ABS) Licensing Framework for an overview of the type of factors taken into account when determining a licence application.

If it is not satisfied of the matters set out at requirements 5 and 6 the CLC shall refuse the application.

If an application is granted with conditions attached, the conditions must be complied with.

Conditions may result in the Recognised Body incurring expenditure and include:

limiting the types of Regulated Services a Recognised Body may provide; or

requiring the Recognised Body to take specific steps the CLC deems conducive to safeguarding the interests of consumers or other regulatory objectives.

Any Certificate issued by the CLC will be endorsed with:

all authorisations that it grants the Recognised Body to carry on reserved legal activities (‘the authorisations’);

all permissions that it grants the Recognised Body to provide non-reserved legal activities (‘the permissions’); and

any conditions applicable to the exercise of the authorisations and the permissions (‘the conditions’).

Any endorsement or condition imposed will take effect at the time the CLC directs (a condition may take effect immediately or at a future time, or it may not have effect until after any review or appeal in relation to it).

The CLC will record on its register in respect of each Recognised Body:

its name and practising address,

the endorsements and conditions, and

the date from which the Certificate takes effect and its duration

An entity can only undertake Legal Activities as a Recognised Body if it has a Certificate in force.

A Recognised Body can only carry on its authorisations and permissions whilst acting as a Recognised Body.

A Recognised Body must not carry on any reserved legal activity which is not within its authorisations.

When carrying on its authorisations and permissions, a Recognised Body must comply at all times with its terms.

The Certificate must be returned promptly to the CLC if it ceases to be eligible to remain a Recognised Body, or if the CLC demands return of its Certificate.

Whilst the Certificate remains in force, the Recognised Body must notify the CLC of any changes to the information provided under items 5 and 6 within seven days of becoming aware of such changes.

A new Certificate takes effect the day following the expiration of the existing Certificate unless otherwise directed.

Provided a completed application has been received by the CLC and no new Certificate has been issued, an existing Certificate shall not expire at that time but shall remain in force until a new Certificate has been issued. If the renewal application is refused, the existing Certificate remains current until expiry of the period within which an appeal may be brought, or, if an appeal is brought, until the appeal is determined or abandoned.

At the time of issuing the Certificate, or at any time subsequently, the CLC may, in its discretion, issue the Certificate with such endorsements or conditions as it thinks fit, or remove any endorsement or condition that it has imposed.

Where an endorsement or condition is made to a Certificate or an endorsement or condition that has been made is later amended or removed the CLC shall record this in the register.

If making an application for removal or variation of any endorsement or condition on a Certificate other than when the Certificate is due to be renewed the applicant must use the appropriate CLC form, correctly completed and signed by a Manager and accompanied by the fee payable.

Where an application has been made for amendment or removal of any endorsement or condition the CLC will notify the applicant of its decision within 42 days after it has received the application. If the applicant is not notified of a decision within this period, the application will be deemed to have been refused.

When the CLC agrees to the removal or amendment of any endorsement or condition, such endorsement or conditionwill remain effective until the Certificate is delivered to the CLC’s offices together with the fee payable.

The CLC may refuse an application for the removal or amendment of an endorsement or condition if:

item 26 has not been complied with; or

it is not satisfied that the Recognised Body is a fit and proper person to practise with the removal or variation of such a condition on the Certificate.

In any case where it decides to issue a Certificate subject to any endorsement or condition, or to refuse an application for a Certificate or for the removal or amendment of an endorsement or a condition on a Certificate the CLC will notify the applicant of the refusal of the application and of the grounds on which it has been refused.

Changes in the Recognised Body

No change permitted under items 30-34 is effective unless and until it has been approved by the CLC with or without conditions and any fee (as provided by item 26) has been paid. Depending on the nature of the change proposed, the CLC may require the Recognised Body or any of its owners or Managers to comply with some or all of the provisions of items 5 and 6.

In addition to the requirements of the Notification Code, we must be promptly informed of all such vacancies or changes and we must be provided with full and complete details of the Authorised Person or the Recognised Body (as appropriate) so that we can determine/approve their appointment.

In an LLP of two Members, if one of them:

is committed to prison in civil or criminal proceedings;

is unable, because of incapacity caused by illness, accident or age, to attend to the practice for a period of more than 14 days (or such other period as the CLC may determine);

lacks capacity (within the meaning of the Mental Capacity Act 2005) and powers under sections 15-20, or section 48, of that Act have been exercised in relation to him;

abandons the LLP;

has a licence issued by the CLC subject to a condition which would be breached by continuing as a LLPMember;

is not a CLC lawyer; or

dies.

the Certificate will continue in full force and effect provided the remaining LLPMember is an Authorised Person, and within 28 days of the occurrence (or the end of any time period determined under paragraph (b)) an additional person who is an Authorised Person has become an LLPMember. The remaining LLP must notify the CLC of these changes.

With the exception of a LLP (to which requirement 31 applies) where
a Recognised Body has only one Manager who:

is committed to prison in civil or criminal proceedings;

is unable, because of incapacity caused by illness, accident or age, to attend to the practice of the Recognised Body for a period of more than 14 days (or such other period as the CLC may determine);

lacks capacity (within the meaning of the Mental Capacity Act 2005) and powers under sections 15-20, or section 48, of that Act have been exercised in relation to him;

abandons the practice of the Recognised Body;

has a licence issued by the CLC subject to a condition which would be breached by continuing as a Manager; or

dies;the Certificate will continue in full force and effect provided that within 28 days of the occurrence (or the end of any time period determined under paragraph (b)) a Manager who is an Authorised Person is in place for the Certificate to remain valid, and that in the meantime the CLC has been advised of the arrangements in place to ensure that the interests of consumers are protected.

No person lacking capacity (within the meaning of the Mental Capacity Act 2005) may continue as a Manager. No voting powers may be exercised in respect of any shares registered in that person’s name.

Where there is a change in ownership in a RecognisedBody the effect of which is that:

there is a change of 10% or more in the interest a person has in a Recognised Body); and/or

a Body ceases to exist and another entity (which may be a Recognised Body) succeeds to the whole or substantially the whole of the business of the Recognised Bodythe CLC may determine that:

the licence of the Recognised Body continues in effect (with or without such Authorisations, Permissions and/or Conditionsas the CLC may determine);

the licence of the Body is transferred to the entity which has succeeded to the whole or substantially the whole of that Recognised Body’s business (or to another person approved by the CLC) and that licence has effect with or without such Authorisations, Permissions and/or Conditions as the CLC may determine

provided that the owners and Managers of the Recognised Body are Authorised Persons.

Cessation of Recognition

If the CLC determines that the issue or continuation of a Certificate is likely to have or will have a serious adverse effect on the delivery of positive Outcomes for Clients, the CLC will determine that the Certificate ceases to have effect, notify the Recognised Body and require immediate delivery to it of the Certificate

Appeal

An applicant dissatisfied with a determination made under requirement 7, 8 or 27 may within one month of publication of the CLC’s determination appeal to the Adjudication Panel.

If the application is deemed to have been refused as provided under item 25, the applicant may within one month of the deemed refusal appeal to the Adjudication Panel under section 29 of the 1985 Act.

Inspection and Discipline

To enable the CLC to investigate whether there has been a breach of its regulatory arrangements and to prepare a report as part of that investigation, the Recognised Body must provide to the CLC all its records, papers, files and financial accounts, all of which must be stored on a Durable Medium and be immediately accessible to the CLC.

If it appears to it that there has been a breach of any of its regulatory arrangements, the CLC may take enforcementaction in accordance with its Enforcement Policy.

Additional Information

The CLC will treat an application for a Certificate as having been made on the day on which the applicant has complied fully and finally with item 5.

In considering an application for a Certificate the CLC may, at its discretion, require representatives of the applicantto attend for interview.

Any Certificate issued remains the property of the CLC.

Any document served on a Recognised Body under this Framework will be posted to the applicant’s or the Recognised Body’s principal office.

Any endorsements or conditions imposed will take effect at the time the CLC directs e.g. an endorsement or conditionmay take effect immediately, or at a future date.

A Certificate automatically ceases to have effect if the CLC refuses to recognise an applicant or to continue to recognise a Recognised Body.

An applicant is entitled to a duplicate Certificate free of charge if issued at the same time as the original. At any other time a fee is payable for the issue of a duplicate Certificate.